International Bank For Reconstruction and Development - History

History

The International Bank for Reconstruction and Development (IBRD) and International Monetary Fund (IMF) were established by delegates at the Bretton Woods conference in 1944 and became operational in 1946. The IBRD was established with the original mission of financing the reconstruction efforts of war-torn European nations following World War II, with goals shared by the later Marshall Plan. The Bank issued its inaugural loan of $250 million ($2.6 billion in 2012 dollars) to France in 1947 to finance infrastructure projects. The institution also established its first field offices in Paris, France, Copenhagen, Denmark, and Prague in the former Czechoslovakia. Throughout the remainder of the 1940s and 1950s, the Bank financed projects seeking to dam rivers, generate electricity, and improve access to water and sanitation. It also invested in France, Belgium, and Luxembourg's steel industry. Following the reconstruction of Europe, the Bank's mandate has transitioned to eradicating poverty around the world. In 1960, the International Development Association (IDA) was established to serve as the Bank's concessional lending arm and provide low and no-cost finance and grants to the poorest of the developing countries as measured by gross national income per capita.

The IBRD began investing in development projects such as the Japanese high-speed railway system in 1964. In 1971, the IBRD set up an agricultural scientific research partnership organization to promote research and technology in agriculture. Its initial investment in renewable energy projects was made in 1973 when it financed the development of a geothermal power plant in El Salvador. That same year, the Bank approved an increase of 40% in agriculture financing. The Bank issued its first loan for environmental improvements to Finland in 1975 to finance investments in combating water pollution. In 1978, it began its annual World Development Report, which discusses growth prospects for developing countries. Throughout the 1980s, the Bank donated funds to the World Food Programme, a branch of the United Nations which presently provides food aid to countries facing humanitarian crises. It began helping to implement the Montreal Protocol in 1989 which encourages the phasing out of certain substances which accelerate ozone depletion.

In 1991, the IBRD declared that it will not fund commercial logging projects in tropical rainforests. That same year, the IBRD sponsored projects to improve market competitiveness and create jobs in South Africa, during the onset of the end of apartheid. In 1995 toward the end of the Yugoslav Wars, the IBRD began financing reconstruction projects in the former Yugoslavia. Under its Heavily Indebted Poor Countries initiative, the Bank relieved Uganda's debt in 1997. In 1998, the Bank launched a fraud and corruption hotline for any individual to report an abuse of Bank funds by projects or individuals.

The Bank set up a Prototype Carbon Fund in 2000 to promote technology transfer to developing countries for addressing climate change. The IBRD became a member of the Global Alliance for Vaccines and Immunization to combat premature deaths among children. In 2005, the Bank issued the first loan to Iraq in in 30 years to support education and the restoration of schools. The Bank faced increasing competition in Latin America from private capital markets, where the IBRD held $36.3 billion in loans in fiscal year 2006, due to mixed views on the stipulations of environmental protection and protection against the uprooting of indigenous populations attached to the Bank's lending.

In response to the 2007–2008 world food price crisis, the IBRD initiated a Global Food Crisis Response Program which provided food assistance to 40 million people across 44 countries As of 2011. The IBRD's lending accelerated and expanded in 2009 in response to the global financial crisis, committing approximately $60 billion USD to support developing countries, which was 54% more than it had committed in 2008. The Bank's education lending reached a historical high of approximately $5 billion USD in 2010. In 2010, the Bank opened all of its data to the public, primarily via the establishment of its data.worldbank.org website. By April 2011, approximately 100,000 visitors per week accessed its data and the Bank awarded prizes to people who had participated in the first competition to use the data to develop mobile apps. That same year, the IBRD loaned $200 million from its own accounts and $97 million from its Clean Technology Fund to a solar power plant project in Morocco.